Matale District Parliamentarian Rohini Kaviratne has criticized the government’s recent tax revisions, claiming they provide selective relief to higher-income groups while imposing a disproportionate burden on ordinary citizens, particularly savings account holders.
In her press release, Kaviratne highlighted that the government has reduced the Pay-As-You-Earn (PayE) tax threshold, benefiting 121,000 taxpayers. Previously, the limit for PayE tax was Rs. 200,000, but the revision reduced it to Rs. 150,000, providing direct relief to salaried professionals in this income bracket.
However, the same tax policy increased the withholding tax on interest earned from fixed deposits and savings accounts from 5% to 10%. This adjustment affects 1.61 million active savings account holders in Sri Lanka, many of whom rely on their savings interest to meet essential daily expenses such as food, medicine, and utilities.
Kaviratne emphasized that the tax increase targets a significant portion of the population, including low-income and middle-class individuals. It is estimated that nearly 5 million people are directly or indirectly impacted by the higher withholding tax. Many of these individuals depend on small amounts of interest from their savings accounts to navigate the economic crisis.
She also noted that the government has claimed these revisions aim to stabilize revenue streams during an economic downturn. However, Kaviratne described the measures as “short-sighted and cruel,” arguing that they disproportionately harm the country’s most vulnerable citizens while providing benefits to a relatively small segment of the population.
“The economy continues to shrink, and the lower middle class is already struggling to make ends meet,” Kaviratne stated. “Imposing an additional tax burden on savings account holders, who often include pensioners and low-income families, is unjustifiable.”
She called on the government to reconsider the tax revisions and adopt policies that ensure equitable distribution of the tax burden while providing meaningful relief to those most in need during the ongoing economic crisis.
